“Markets are pricing in a higher risk premium,” said a commodities strategist at a Tokyo-based firm, noting that gold’s role as a defensive asset is once again in focus. Still, the rebound remains shallow. Year-to-date, gold is up just under 12%, but the upside appears to be constrained by macroeconomic policy headwinds.
Silver Holds Gains Near $36.75, Tracks Broader Market Sentiment
Silver (XAG/USD) also posted a modest gain, trading around $36.75 after touching an intraday high of $36.78. The metal, which often follows gold’s lead, has benefited from recent safe-haven flows but is facing resistance from a firm U.S. Dollar and a tightening monetary outlook.
Despite recent gains, both gold and silver are constrained by the Federal Reserve’s latest policy signals. While the Fed held its benchmark rate steady at 5.25%–5.50 %, the updated dot plot showed fewer projected cuts in 2025–2027. Notably, seven of nineteen Fed officials now expect no cuts this year, and the central bank cited potential inflation risks stemming from new trade tariffs.
As a result, the U.S. Dollar Index (DXY) rose to a nine-day high, weighing on metals. Gold and silver, which are priced in dollars, typically struggle during periods of dollar strength due to decreased purchasing power for non-dollar investors.
With U.S. markets closed for Juneteenth and no significant data releases ahead, low liquidity may lead to volatile swings. Traders are watching the dollar and geopolitical headlines for short-term direction.
Short-Term Forecast
Gold and silver face near-term pressure after breaking key support levels, with bearish momentum building. Without swift recovery above resistance, further downside toward $3,319 and $35.61 remains likely.
